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MND NewsWire features plain and simple interpretations of industry related data and events written in a manner that maintains the interest of random readers while still catering to the perspective of a housing market professional.

Fannie Mae's latest National Housing Survey shows that
Americans have markedly changed their perception of homeownership.

The most recent survey,
conducted between October and December 2010, revealed that 64 percent of
respondents felt buying a home was a safe investment. This is 6 points below the responses given in
a January 2010 survey and 19 points below the answers to an initial survey
conducted in 2003. Persons who are
currently renting or who are delinquent on their mortgages ranked home owning lower with 53 percent of both subgroups feeling a home was a safe investment.

But at the same time, 84 percent of consumers believe that
owning a home makes more sense than renting, a number that has remained relatively
stable since the January 2010 survey. Respondents gave, as positive reasons for homeownership
the quality of local schools (79 percent) and safety (also 79 percent.) These ranked far ahead of any financial
considerations such as tax benefits or a belief that paying rent makes less
sense. Among
renters 28 percent thought renting made more sense.

The National Housing Survey was conducted by phone with
3,407 Americans age 18 and up. The
sample included a random group of 3,004 members of the general population made
up of 751 homeowners, 1,232 mortgage borrowers, and 871 renters. An oversample of 403 random delinquent borrowers
was also contacted. Fannie Mae conducted
similar surveys in January and June 2010 and from July to September 2010 and in
2003. The survey reported out some of
its findings among subsets which included renters, delinquent borrowers,
Afro-Americans, Hispanics, and "Generation Y" (adults aged 18 to 34.)

Americans have grown more confident about the stability of
home prices than they were one year ago although this is not matched by their
attitudes regarding strength in the economy.
A majority (78 percent) feel that home prices will either stay the same
or go up (73 percent held this position in January) versus 19 percent who
expect further declines. Expectations
among the 26 percent expecting an increase were modest; the average projected
increase was 0.4 percent.

A larger share
of respondents - 39 percent - expect rents to increase over the next year with
the average estimate of increase at 2.8 percent.

"Over the course of the last year, we gained deeper insights into Americans' confidence in the strength of the housing market and the economic recovery," said Doug Duncan, Vice President and Chief Economist of Fannie Mae. "More Americans believe that housing prices will remain stable over the next year. We also are seeing encouraging signs in the positive attitudes toward homeownership among younger Americans, despite the severe impact of the housing crisis on Generation Y. But most respondents to our survey continue to lack confidence in the strength of the economic recovery, and they are less optimistic about their ability to buy a home in the years ahead. This sense of uncertainty is weighing on the housing recovery today and reshaping expectations for housing for the future."

Consumers' own financial situations have not improved over
the last year. Six in 10 respondents
said their monthly household income has remained about the same compared to
January 2010 while nearly half of the delinquent borrowers reported a
significant decline. Significantly
higher expenses were reported by 34 percent of respondents and 22 percent
reported significant declines.

Financial reasons were most frequently named as significant
obstacles to owning a home; poor credit topped the list. 42 percent of renters and seventy-three percent of delinquent borrowers cited income which is insufficient for their existing
expenses. Seventy-nine percent of
renters believe they would have to make a financial sacrifice to own a home and
54 percent say it would require a "great deal" of sacrifice.

The number of delinquent borrowers who say they have
considered defaulting on their mortgage has declined from 39 percent in January
2010 to 31 percent and most Americans (86 percent) continue to disapprove of
strategic defaults even when the home is underwater.

Despite being hit hard by the housing crisis which saw the
homeownership rates in its age group drop almost four percentage points since
2009 to 39.8 percent, Generation Y remains positive about owning a home. Sixty-one percent of that subgroup in the
survey felt that buying a home is a safe investment. They gave a higher value to the impact of
homeownership on societal status and as a place to raise children than did
other subgroups in the survey.

Minority groups have a more positive outlook toward
homeownership and the economy than the general population. Fifty-none percent of Hispanics expect their
personal financial situation to improve over the next year compared to 78
percent of the general population and 40 percent of African Americans. About a third of each of the two minority
groups say that it is likely they will buy a home in the next three years
compared to about 25 percent of all survey respondents. Both Hispanics and African-Americans are more
likely, in most cases by double digits, to place a high value on homeownership
as a good place to raise children, a better way to provide an education for
those children, a motivation to be a better citizen, a place to keep your
family safe, and as a wealth builder than is the general population.. Only 38 percent of African Americans think
the economy is on the wrong track compared to 62 percent of the general
population and 59 percent of Hispanics

Comments

The pollsters should teach the banks how they got the delinquent homeowners to call back! Joking aside, I wonder how many of those who listed poor credit as a barrier are actually pretty good borrowers squeezed into believing they're a poor risk by our current lending guidelines.

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